15th Oct 2013 10:03
LONDON (Alliance News) - Shares in SDL PLC dropped 11% after it issued a profit warning Tuesday, saying that its performance for the third quarter ended September 30 had been below expectations, causing the company to lower its outlook for the financial year.
SDL now expects a profit before tax, amortisation and one off costs to be around GBP8 million, down from GBP35.5 million in the previous year.
The customer experience management software and services company said that it had achieved sequential revenue growth in its Language Services business, but it did not expect this growth to offset the shortfall in the third quarter caused by delayed orders. The company said that it expects new client wins to grow revenues towards the end of the year and into 2014.
Bookings in its Technology business were weaker than expected in the third quarter, and SDL expects license revenue to fall short for the year.
The company also said that the Court of Chancery in Delaware had ruled in favour of Trados in its litigation over an alleged breach of fiduciary duty in the sale of Trados to SDL. The company expects exposure of GBP500,000 but said that there was also a potential reimbursement of funds from the Trados directors of between GBP1 to GBP2 million.
Despite this, SDL said that investments made in its infrastructure and headcount reductions would realise savings for the company, and total savings in 2014 were expected to be around GBP6 million.
Shares in SDL were trading down 11% at 251.25 pence Tuesday morning.
By Hana Stewart-Smith; [email protected]; @HanaSSAllNews
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